Sported Governance pages

Basic governance requirements

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evolve

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Lifecycle of a group

What is governance?

Basic governance requirements

In a nutshell Governance is the systems and processes that ensure the accountability, direction and effectiveness of an organisation. Good governance ensures your organisation can achieve what it has been set up to do and deliver for your community.

Setting up Identify a need Make a plan This stage is characterised by high energy, but limited funds Define structures Focus on fundraising

Running your group Develop good governance Formalise processes Grow and develop Growth and funding keep pace

Develop and evolve Mature organisation Established with a growing reputation A happy place - things work and everyone knows what to do Can lead to siloed thinking, rigid policies Complacency, stalled innovation can lead to decline

Close - think about the end and build in safeguards Can be after an organisation fails to evolve and begins a decline Could be a natural winding up after a need has changed A good ending should be considered from the start

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More on some common structures and status

This unit:

More on legal structures

Sported guides overview

Governance

Governing documents

Introduction

Quiz

Group structure

Summary

Legal matters

Board

Charitable status

Incorporation - what is it?

Charitable Incorporated Organisation (CIO)

Do we need a legal structure?

Company limited by guarantee

Community Interest Company (CIC)

CASC - Community Amateur Sports Club status

Unincorporated association

Getting it right at the start

Governance

Please review this course

Sported guides overview

This unit:

Governing documents

Introduction

Quiz

Group structure

Summary

Legal matters

Board

Responsibilities

Trustees

Setting up

Governance

Sported guides overview

Please review this course

This unit:

Do you know who is responsible for maintaining these documents within your organisation?

NCVO webinar on writing and amending your governing document

Governing documents

Introduction

Quiz

Group structure

Summary

Legal matters

Board

Charities

Companies

For every organisation, whether a company or a charity, there are legal policies and requirements.

Please review this course

Which policies you need depends on lots of things including your legal structure and the activities you deliver.

This unit:

Governance

Governing documents

Sported guides overview

Introduction

Quiz

Regional differencesIn the UK Charity law is devoved, but tax law is not.This paper has a lot more information, or contact Sported for more help on this.

Group structure

Summary

Legal matters

Board

The Charity Governance code is a useful tool to help small charities and other not for profit organisations in England and Wales

Safeguarding policy

Insurance

Sported policy templates

Pop over to the Sported Hub to download policy templates to adapt and use for your group.

Take a look at this Charity Commission guide

Hop over to the Sported Hub for more on Safeguarding policies and how to get this right for your group

Joe Cartwright and Jude Toasland from the NSPCC Child protection in sport unit presented this webinar for Sported members

Your group will need to have insurance set up in order to operate safely.

Insurance

Take a look at this guide on the Sported Hub.

This short presentation outlines why you need insurance

All companies, including CICs require two governance documents: The Memorandum of Association and the Articles of Association. These documents set out the rules and conditions of the CIC.

Articles of Association

Download a template for Articles of Association

Asset lock

Dividend and interst cap

Directors' duties

Rules

Reporting

Memorandum of Association

All companies, including CICs require two governance documents: The Memorandum of Association and the Articles of Association. These documents set out the rules and conditions of the CIC.

The Memorandum is a short document which confirms that the subscribers wish to form a company and agree to become a member of the company. If the company is limited by shares they agree to take at least one share in the company.

This must be incorporated into the CIC Articles of Association. It ensures the assets are used for the benefit of the community and sets out how the assets can be transferred and to whom. Take a look at this Gov.uk blog post de-mystifying Asset locks.

Only for CICs limited by shares, this limits this dividends paid to shareholders to ensure the primary focus of the CIC is to benefit the community. The CIC Dividend cap is explained in more detail in this post from KG Accountants.

As well as standard Director's duties, in a CIC the duties reflect the additional responsibilities of running a community focused enterprise. KG Accountant's blog post on Director's duties has more on this.

CICs are required to report annually to the CIC regulator on how they have met their community goals. This is not required to be written into the Articles of Association - but it's good practice to do so.

CICs are required to report annually to the CIC regulator on how they have met their community goals. This is not required to be written into the Articles of Association - but it's good practice to do so.

In this video, Sported's Paul Steel explains the four basic elements of good governance which funders look for. Click here to watch the full webinar.

Required governance

Revised code for Sports Governance

• Democratic
• Transparent
• Representative
• Non profit

Four key elements

You need a base level of govenerance to run a group safely. Sport England have developed some guidance you can look at, which outlines their level of Tier 1 governance.

Why you need a legal structure

No - not all community groups and beneficiary organisaitons are charities. There are other options which may suit your group better.

But what do they all mean?

To protect your committee members and insulate individuals from financial risk, you will need to incorporate your organisation. When you incorporate, you'll need to choose a legal structure.

Does this mean we need to register as a charity?

Take a look at the detailed information by clicking on each structure on the main page.

Watch the full webinar here

A limited company structure for social enterprises with a focus on community benefit.

Community interest company

Office of the reguator of CICs

• members liability limited by guarantee
• can pay dividends and directors, but must benefit the wider community
• assets are locked in for community benefit
• cannot get charitable tax benefits, but can convert to a charity

For a more detailed view, look at this guide from Charity Excellence

In this webinar, Sported's Paul Steel explains some of the most common legal structures.

This status allows grassroots sports clubs to benefit from favourable tax rates, including claiming Gift Aid.

Community Amateur Sports Club (CASC)

Charity Commision guide to CASCs

• lighter reporting responisbility compared to charities
• some tax benefits, e.g. can claim Gift Aid

• has conditions e.g. membership must be open to the whole community

• a CASC cannot also be a charity

England Rugby guidance on the pros and cons of becoming a CASC

Gov.uk guide on CASCs including tax infomration

An unincorporated group is a collection of individuals who are legally liable for any debts the group incurrs. So if you don't want to expose your Committee members to personal risk then YES - you do need to incorporate.

This is the first question you must answer. If your group has come together and has no legal strucutre, is not registered as a company or charity, it is unincorporated. Incorporated or Unincorporated group? In this clip, Club Development Consultancy explain the pros and cons of incorporation

Incorporated or unincorporated group?

What is incorporation, and do you need it?

In this clip, Club Development Consultancy explain the pros and cons of incorporation

A group of individuals who have come together to run a club or organisation.

Unincorporated association

• simple to set up - no reporting duties or restrictions
• no special tax benefits
• no separate legal status, so committee members could be personally liable for debts
• assets are held by individuals so have to be transferred if that person leaves

Read more in this article from Morton Fraser.

• Trustees and Directors plan how the group will achieve its goals
• Take decisions and vote
• Work within the organisation's constitution
• Use their skills to benefit their community

The exact role and responsibilites will vary, depending on the structure of your group.Charities have a Board of Trustees.

Trustee/Director responsibilities

Charity Commission guide

Guidance for non-charity companies

Part of this role is to run and attend board meetings, where decisions about your organisation can be discussed and made.Sported volunteer consultant David Williams has some advice on running effective board meetings.

The Charity Commission have a guide to what is involved.Companies are subject to company law, and have a Board of Directors.

A Constitution is the Governing document of a charity, which legally, must be followed. It should include:

Constitution

Charity Commission: How to write your Governing Document guide

• what the charity is set up to do
• what it can do to carry out it's purpose
• who will run it
• rules around meetings and Trustees
• what happens if the chairty closes

The Governing document ensures that:

• the charity's activities remain within the charitable purposes
• any new activities are allowed within the charity’s purposes
• the charity follows rules around how the board of trustees are appointed and managed
• trustees have a good knowledge and understanding of their governing document.

A Constitution is a legal document which sets out the Charity's purposes. These should fall within one or more of the 13 descriptions of purposes listed in the Charities Act, and be for the public benefit.

Watch the full webinar here

A legal structure for non-profits and charities offering a separate legal personality, limiting liability for members and trustees.

Charitable Incorporated Organisation

Charity Commission - Setting up a new charity

• members liability limited
• only needs to register with the Charity Commission
• not a company, so not subject to company law
• Foundation CIOs: decisions are made by Trustees
• Association CIOs: wider membership has a role in decision making

For a more detailed view, look at this guide from Walker Morris

Read more on what your governing document should contain with this advice from the NCVO

If your organisation has charitable aims, you can register with the Charity Commission.

Charitable status

For a more on which charitable structure to choose, see this guide from the Charity Commission

Registering as a charity is not a legal structure, so charities can be unincorporated.To have a separate legal status, a group still needs to choose a suitable structure.Becoming a Charitable Incorporated Organisation (CIO) may be suitable.

Trustees

Consider the range of skills and types of people represented on your board. Do you have community links and youth representatives (if appropriate)? Try to create a diverse and representative group, not an echo chamber.

Try to avoid as much as possible!Minimise the amount of family members/ individuals with personal relationships Minimise conflicts of interests or duality of interests, and keep a record of any conflicts of interest

What skills do you need to help you run the activities/group (e.g. fundraising, marketing, safeguarding)? Check out this skills audit to help you work out what your organisation needs on its board

Start to define roles such as chair, treasurer, secretary, safeguarding officer Draw up a list of general and specific responsibilities Be open and honest with prospective Trustees, nobody likes to be misled on the level of time commitment.

safeguarding

roles and responsibilities

representation

skills and experience

conflicts of interest

Think about how you will recruit people safely as part of your Safeguarding Policies and Procedures (e.g. obtaining references, checking certificates, background checks)

A company without shareholders or shares. Typically used by non-profits and charities, this type of company is controlled by guarantors (members), who guarantee a nominal sum of money to the company in the event of its becoming insolvent or winding up.

Company limited by guarantee

Lawbite have more details on the pros and cons of becoming a company ltd by guarantee.

Think about the skills you'll need present. You can use this skills audit template to help balance your board's skill set.

Building your board

Ideally around 5-9 members, having an odd number on your board will avoid a deadlock when voting.

Check out this video on the legal requirements for setting up a board of trustees

Are your Board members invested in your group? Passionate about the changes your organisation wants to make? Your board needs to share a vision.

factsheet

skills

legal

size

passion

Check out this factsheet from Action Together on setting up your board of Trustees/Directors